by Jan Malasek | May 10, 2023 | Procurement Operations, Strategic Sourcing, Uncategorized
By Steve Miller – https://www.linkedin.com/in/stevemiller-coo/ Mike Nolan of SourceSuite.com noted that “the first traces of procurement can be seen throughout ancient history, including the Egyptians in 3,000 BC.”1 Jose Ignacio Lopez de Arriortua made a company’s lead procurement role both famous and infamous over 30 years ago by first helping GM to “save billions of dollars” and then being “charged [by GM] that he had absconded with 20 boxes of top-secret documents.”2 Is it surprising, then, that after thousands of years of practice and 30+ years of high visibility that most CEOs and CFOs up until 2020 believed their procurement functions were either world class, or at least adequate, for the business challenges they might face? These executives learned from 2020 to 2023 what many top procurement experts already knew: you can find stars and strategic executives in procurement, but overall, it is a function very early in its transformation toward functional excellence. Most business executives don’t understand what excellent procurement looks like. As an example, a Fortune 100 CEO in 2019 said this about the value of having a head of procurement: “if we can buy things like pencils for a cheaper price, then why not?” It probably is not a surprise that in 2020 this company saw its direct operating and SG&A costs increase over $400 million, almost all of which dropped to the bottom line in terms of reduced operating income. Kearney’s 2022 Assessment of Excellence in Procurement study found that leaders, compared with their industry peers, generate nearly 2x more total shareholder return, rebounded 3x stronger through COVID, and contributed 200 basis points more to... read more
by Jan Malasek | Mar 29, 2023 | OnDemand Update
March 29, 2023 OnDemand Resources, the leading provider of independent project and interim talent in Strategic Procurement, Supply Chain and Operations is delighted to announce the addition of Gary Long, a seasoned consultant with significant experience supporting clients in their efforts to achieve exceptional results as they pursue cost reduction and efficiency improvement initiatives to the team. Mr. Long brings to OnDemand over three decades of Procurement & Supply Chain experience across both industry and management consulting. His industry experience includes Pepperidge Farm, Sealed Air Corporation and Teva Pharmaceuticals. His consulting experience includes senior positions with Kearney, Accenture, FTI and others. He has supported clients in the areas of Sourcing & Procurement, Supply Chain Strategy, Logistics and S&OP. He has successfully combined his hands-on experience in industry with leveraging leading practices gained from 20+ years of management consulting experience across a broad array of industries including but not limited to CPG, Diversified Industrials, and Pharmaceuticals. “I am delighted to join the high performing team at OnDemand. I had the pleasure to get to know Jan and his team over the years, both as their client as well as a consultant in their network and was always impressed with their ability to serve their clients with exceptional independent talent to get results.” said Gary Long. “We are pleased to welcome Gary to our team, to help us accelerate our strong growth which is only possible by continuing to deliver superior work for our clients,” said Jan Malasek, OnDemand’s CEO. “Gary’s great client management and engagement skills will ensure that our existing and new clients will get the support needed to achieve... read more
by Jan Malasek | Mar 21, 2023 | Strategic Sourcing
A global confectionary company with HQ in the US has embarked on a mission to reduce cost and improve strategic supplier relationships. While making strong progress in most areas, Brand and Marketing has been a challenge to engage due to their perception that Procurement lacks subject matter expertise. In order to address this perceived shortcoming, the Global Director of Procurement turned to OnDemand Resources for help to provide a Marketing Spend Sourcing Expert who could lead projects across the Brand and Marketing Category. OnDemand engaged a former client and current independent consultant / member of the OnDemand Professional Network Michelle Griffith to help the company develop and execute strategic sourcing relationships with their Marketing partners. SITUATION OVERVIEW The Marketing Category was challenging – Client had a large portfolio of brands (15+) and a large portfolio of agency types on the roster (15+) – all at different life cycle stages and with significantly different budgets. Additionally, the Client was transitioning a new piece of business, bringing in not only new brands but also new staff members that were not accustomed to their policies and practices. Single sourcing was happening throughout the organization as the procurement function was relatively new to most. Michelle started to engage with Brand and Marketing on smaller projects to build momentum – she understood that building trust and relationships is critical to procurement success. As time progressed, she was able to demonstrate significant procurement value and was tasked to lead larger and more complex sourcing engagements. Her success in building substantial procurement momentum helped Brand and Marketing deliver significant and sustained results. The Client was so... read more
by Jan Malasek | Feb 8, 2023 | Procurement Operations
Digitization of strategic procurement processes and capabilities has been the biggest advance in the world of procurement over the past 10 years. This enablement allows companies and their suppliers to be more efficient, effective and accurate and hence significantly adds to increasing value across the extended enterprise. Read how a global oil services company went about improving the digitization of the source-to-pay process after a merger. SITUATION OVERVIEW When the CFO heard the procurement team explain the importance of a software portal for suppliers to register and manage their banking and payment information, he had an “ah-ha” moment. Realizing a similar need for the company to register and use their customers supplier portals to ensure proper payment through the order-to-cash process, he understood the efficiency of the same process for a supplier portal to manage the company’s suppliers. This “ah-ha” moment provided the procurement team with a way to align with the CFO and other executives to continue developing their source-to-pay digital strategy. As a result of a recently merged global oil services company with over $3 billion in annual revenue, the procurement team needed to implement a digital system to support the purchasing requirements across multiple business units and ERP systems. This need was driven by two factors. Frist, because of the merger, prior procurement software licenses expired and second, the newly merged entity started to experience significant operational problems processing supplier payments. These factors had a cascading impact on the central procurement’s team capability to manage supplier relationships necessary to meet delivery and cost reduction goals. Given these factors, executives including the CFO, COO, CIO and VP... read more
by Jan Malasek | Jul 19, 2022 | Strategic Sourcing
SITUATION OVERVIEW A leading global transport company anticipated generating significant cost savings and scale efficiencies as the direct result of a merger. A majority of the cost savings were expected to come from a North America-wide strategic sourcing initiative, within which Employee Benefits was targeted as a key savings area. The company lacked deep domain expertise in sourcing employee benefits – given the potential for significant savings, but also the risk involved in sourcing this category, the company turned to OnDemand Resources to provide a strategic sourcing expert with deep experience sourcing the employee benefits category. Their desire was to deliver savings while maintaining benefits levels, and also transfer category knowledge onto their in-house team for on-going effective category management. OnDemand offered several consultants with the desired background, and the company chose a member of our OnDemand Professional Network to lead and implement the project. SOLUTION OnDemand consultant provided hands-on project leadership for cross-functional teams in understanding and defining requirements and managing the transition throughout the company. He followed a sourcing methodology that included spend analysis and requirements gathering, especially focused on understanding the current benefits levels, market research and sourcing strategy development, and contract negotiation and implementation. The consultant worked closely with internal resources to develop and implement an e-auction process for each product within Employee Benefits category in order to maximize marketplace competition and savings while maintaining – if not improving – each segment of the employee benefit program. RESULTS The results of the process far exceeded our expectations, especially in light of the very short timeframeDirector, Indirect Sourcing As a result of OnDemand consultant’s leadership, the... read more
by Jan Malasek | Apr 13, 2022 | Strategic Sourcing
Managing professional services spend is always a challenge – often vendors have deep relationships with key stakeholders within a company that can lead to suboptimal engagement of the right external capabilities and diminished value. To be successful strategic sourcing must use data and a fact-based approach in close collaboration with key internal stakeholders to deliver the optimal results – here is an example of F500 company Legal Sourcing exercise that delivered significant savings for the organization. SITUATION The Corporate Legal department had over 200 law+ firms servicing their various corporate needs. Numerous firms were one-time use only, many were engaged for one case only, and others were routinely given new cases due to an existing relationship with the firm or one of its lawyers, and not based on their core capabilities or the best value provided. The company did not have formalized guidelines or procedures in places to manage legal spend – each law firm was managed individually, or even worse, each case was managed differently. There were no negotiated rates in place for external counsel. An e-billing system was in place, but was used poorly and often not at all. A new General Counsel joined the Company with one of key goals of applying cost management practices to law firms and external services as part of Company’s overall profitability drive. He was supported by the Category Lead, Jo Ellen Hatfield, a member of the OnDemand Professional Network. APPROACH First, to gain an understanding of how firms are selected and assigned a case, Jo Ellen met with Legal team leaders of each practice area to understand their key requirements, and their process for selecting, engagement and... read more
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